SQUEEZING PROFITS

With sales topping $1 billion dollars in 2002, who wouldn't want in on the juice and smoothie business? Now, imagine a 20 percent climb in sales for 2003. Well, according to Juice Gallery Multimedia through its marketing entity, The Juice and Smoothie Association (JASA) report, The Juice and Smoothie Bar Industry Analysis, that is exactly what has happened.

“The industries' revenue total is up more than 20 percent from last year's figures,” says Dan Titus, president of Juice Gallery Multimedia. “We are definitely seeing a renewed interest in the industry as more and more consumers opt for healthier food alternatives. As many major fast food chains jockey to adjust their menus in light of recent litigation regarding obesity claims, the juice and smoothie industry continues, as it always has, to offer healthy food for a busy society. “We are a niche market in the restaurant industry, but our mission has never wavered. We sell health not products. It has always been a matter of choice for the consumer. That has always been our battle cry,” says Titus.

But for health clubs and fitness facilities there is more to having a juice bar — or in some cases, full-blown cafés or restaurants — than ancillary profits.

“The business model of health clubs has changed a lot over the last 22 years. You used to find a spot, buy some equipment and you were in business. Today, the clubs are 18 businesses in one with everything from personal training to group exercise, to retail shops, juice bars and more,” says Lloyd Collins, president of City Blends Café, a provider of turnkey juice bar operations. “The $3 or $4 of profit per drink is great but being able to stop members and talk with them to find out what they want and need out of the club helps general managers to provide and cross-sell other, more profitable services while making the member feel at home.”

It is this ability to interact with, and encourage interaction between members, that may be the biggest value to a well-run and inviting juice bar.

Anyone can put in treads, strength equipment, etc., but the real issue is building relationships and if you can get people to tack some time onto their 30-minute workout at the café, you can help build that relationship,” says executive vice president and chief operating officer of Lakeshore Athletic Clubs, Mickey Sons. “We are not in the food and beverage business, we are in a dues business. But, if offering them a great selection of things to eat and drink in a warm, inviting setting helps members feel more involved with the club, then it will have a residual effect on our core business.”

While adding a more extensive juice bar or café seems like a relatively easy decision based on the potential impact to the business, there are plenty of things to think about from whether to do it yourself or lease the space, to layout and design, to staffing to what will be offered to members — and in many cases, non-members, too.

One of the biggest and most important decisions is answering the question of who is behind the bar?

We aren't talking about the bartender here — although that decision, in the end, is paramount. The question comes from the business plan behind the juice bar as to whether a club will lease the space, license the business from an established company or go it alone.

Each of these decisions has potential peaks and downfalls for a business.

“You can lease the space and guarantee yourself steady rent, be it $1,000 or $8,000 a month depending on the space or you can do it yourself and probably make 20 percent of that,” Sons says. “But we feel that the extra worries combined with the benefits of providing service in line with the clubs' standard makes it worthwhile to do it ourselves. In the end, regardless of who is providing the service, the member perceives it as part of the club so you have to make sure it is up to your standards; that is just easier to do if you do it yourself.”

Meanwhile, New York City-based Equinox Fitness Clubs leases out the space, but keeps tight control to ensure that the company's image is represented.

“With so many locations and so many juice bars we use vendors that will help us with our healthy lifestyle branding,” says Denise Berg, general manager of the chain's soon to be opened Columbus Circle location in Manhattan. “What Equinox tries to do is make sure there is a proper match and that we connect with the people in the clubs. While outsourced, we make sure that the GMs at each location control it so the experience meets the standards of our club. Equinox does try to set itself apart from other clubs and that has to reflect throughout the entire club including retail space, juice bar or anywhere within the club.”

Venus, a Millford, CT-based full-service club for women, has found what it feels is the right mix for its juice bar. The club has licensed its Lady Extreme juice bar through Extreme Blendz allowing its members a choice of more than 50 flavors to consume at its full juice bar or lounge.

“Our juice bar and lounge is the main focal point of the club. We want our members to ‘belly-up to the bar” and have a special community center for themselves,” says Debi Barton, GM. “We like the idea of licensing out the juice bar from Extreme Blendz. They provide a good and consistent product and service. It makes it easier to control and manage.”

Whether operated in-house or leasing out the space, adding beverage and/or food service at a club offers a myriad of new problems that already often-overworked general managers need to juggle.

“Even when deciding on a healthy menu for the club you run into a problem regarding what healthy eating is,” says Marilyn Kretsinger, executive chef at the recently opened Lakeshore Athletic Club-Flatiron in Broomfield, CO, which features a full-service restaurant with three different seating areas, deli and full bar. “For some people healthy eating is low carb, for some it is low fat and for others it is organic.” For others, Lakeshore's EVP and COO Sons adds, with a chuckle, it can be as simple as a donut without frosting.

While the basic problem of selection is a big one, perhaps even bigger is where to locate the juice bar or café within the club.

“The ideal location for a juice bar as well as retail and spa, is before member check-in, this way it is available to both members and non-members. But to get the non-members in you need to offer quality product and service in a friendly environment. In this arena you have a lot of competition, and what is stopping them from going to Bennigan's or McDonald's,” says Sons. “If you do compete well with traditional food and beverage companies it doesn't limit food and beverage managers and can help increase membership sales by bringing the general public into the club. And in the end, that is our true business.”

Berg says that this is the reasoning behind placement of the juice bars at Equinox clubs as well.

“We do get a fair amount of traffic from both members and non-members that stop in for a snack, shake or quick and healthy lunch,” says Berg. “While our goal isn't so much to turn the area into a social club it gives us a great chance to interact with members and meet potential prospects that we otherwise wouldn't have contact with.”

Even if a club doesn't have its juice bar or café positioned before check in — limiting factors such as adding the bar after build-out, availability of plumbing, etc. often make this difficult to achieve — it can still help increase sales.

“If members feel at home in the club they are far more likely to renew their memberships as well as refer friends and relatives,” says City Blends Café's Collins. “Also when closing a sale what better place to talk about it then at a fun, lively spot. Nobody has good feelings about offices. But sitting at the juice bar with a free smoothie or bottle of water and feeling the energy of the club can only help close a sale.”

Whether you're looking to increase your ancillary revenues, boost retention or even see a jump in sales, it may be worth squeezing in the time and effort needed to design, staff and run a top-notch juice bar or café.

JUICE'n JIVE

Having a juice bar or café can help boost profits in a number of ways, but only if people know about it. Here are 10 tips on juicing up your juice bar business:

Give tastings and samples at the bar.

Announce juice specials.

Offer samples on the workout floor.

Have special events at the café.

Have happy hour specials.

If you serve foods, tailor it to the season (i.e., soups in the winter, holiday fare, etc.).

Package with other services (i.e., goal-specific package that includes training sessions, nutrition counseling and an equal number of shakes/bars).

Make guest “bartenders” out of your fitness, sales and management staff.

Offer gift certificates for sale or as part of promotions and contests.

If your facility hosts parties or events, build in a catering menu/option.